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Legislation

July 15, 2016

On July 14, hours before the start of a seven-week congressional recess, the House passed a national GMO labeling bill by a vote of 306 to 117. As we discussed here, the Senate recently approved the measure by a vote of 63 to 30. House passage effectively ends a multi-year debate over a national GMO labeling standard and brings preemption of the Vermont GMO labeling law almost to the finish line just two weeks after going into effect.

This bill marks a compromise for both sides of the aisle, with 81 Democrats and 36 Republicans voting against the bill on the House floor. While Democrats were successful in securing a mandatory GMO labeling standard, Republicans negotiated flexibility in the disclosure, which can be in the form of text, a symbol, or a QR code.

President Obama is expected to sign the bill into law within the coming days. Food manufacturers will then want to watch closely for USDA’s implementation of the GMO labeling standard.

July 08, 2016

On July 7, 2016, the Senate passed a compromise GMO labeling measure led by Senate Agriculture Committee Chairman Pat Roberts (R-KS) and Ranking Member Debbie Stabenow (D-MI) by a vote of 63-30. The bill would preempt Vermont and other states and localities from establishing or implementing conflicting GMO labeling laws by requiring the U.S. Department of Agriculture (USDA) to establish a mandatory GMO labeling standard within two years after enactment. The bill intends for manufacturers to then label packages of food products with text, a symbol, or a Quick Response (QR) code or similar technology. (Read our June 27 blog post for more information about the bill.)

The House will need to consider the bill, but will likely take it up in September because its recess starts the week of July 17. Last July, the House passed its GMO labeling preemption bill (H.R. 1599) that would allow manufacturers to voluntarily label their food products -- instead of being required to label -- under the jurisdiction of the Food and Drug Administration (FDA). House Agriculture Committee Chairman Mike Conaway (R-TX) has indicated that leadership is determining its strategy and considering all options, but has provided no further detail.

Although passage of the Senate bill required a simple majority, Sens. Roberts and Stabenow faced challenges from opponents on both sides of the aisle. Opponents notably argued that the bill’s definition of “bioengineering” would create consumer confusion and that the digital disclosure option could limit consumers’ access to information. Vermont Sens. Patrick Leahy (D) and Bernie Sanders (I) attempted to hold up the bill in protest of Majority Leader Mitch McConnell’s (R-KY) decision not to consider amendments.

Disagreement over key provisions of the bill extends to USDA and FDA, which may inform some of the challenges USDA will face in implementing the bill should it be enacted. FDA contends that genetically engineered foods (“GE”) do not pose any safety concerns and, for that reason, GMO labeling should remain voluntary. FDA also contends that the QR code option conflicts with the agency’s statute and regulations requiring disclosures directly on food labels.

FDA also believes the bill’s mandatory disclosure standard would conflict with FDA’s labeling requirements at times. For example, depending on USDA’s GMO labeling requirements for small packages, manufacturers may have difficulties including both the USDA information and the FDA required statements on the label.

FDA also finds the definition of “bioengineering” in the bill to be narrow in scope, which could lead to consumer confusion. The agency points to the phrase “that contains genetic material” and argues that foods from GE sources (e.g., GE soy, starches, and purified proteins) will fall outside of the scope. USDA disagrees with FDA’s interpretation. USDA asserts that it has the authority to require GMO labeling on food products with ingredients from commercially grown GMO crops, but the agency would consider its authority to determine the threshold of bioengineered material needed for foods to be regulated under the legislation.

Additionally, FDA has concerns with the bill limiting its application to foods where the genetic modification “could not otherwise be obtained through conventional breeding or found in nature,” because this would be difficult to prove.

While waiting for the House’s consideration, manufacturers should evaluate their compliance with the Vermont law, which took effect on July 1. As we noted previously, the Vermont law presumes compliance for foods distributed before July 1, 2016 and sold for retail until January 1, 2017. By contrast, foods produced before July 1, 2016, but distributed after that date, will be subject to penalties. The Vermont Attorney General may enforce the law today, but private rights of action may not be brought until July 1, 2017.

June 29, 2016

When Congress returns to Washington DC next week, we expect the House Energy and Commerce Committee to mark up legislation to reform and limit the authority of the Federal Trade Commission (FTC) as part of its #DisruptFTC series during the two weeks Congress is in session (weeks of July 5 and 11). Congress then leaves for a seven-week recess for party conventions and its traditional August recess.

Last week, the full committee postponed a June 23 mark-up of the #DisruptFTCF legislation due to last-minute changes to the congressional calendar related to the Democrats’ gun control sit-in. If the committee does not find time in its schedule to mark up the FTC bills in July, it will have to wait until September to consider the legislation.

The committee is expected to mark up several FTC bills, including the bipartisan Consumer Review Fairness Act (H.R. 5111) and the FTC Process and Transparency Reform Act (H.R. 5510). H.R. 5510 is a comprehensive bill that combines several other bills that were previously introduced and are aimed at reforming the FTC’s authority, including the following:

The Consumer Review Fairness Act and the comprehensive bill were approved by the Subcommittee on Commerce, Manufacturing, and Trade on June 9. For more information about these bills, please see our previous posts from May 5 and June 2.

Most recently, on June 23, Senate Agriculture Committee Chairman Pat Roberts (R-KS) and Ranking Member Debbie Stabenow (D-MI) unveiled a bipartisan agreement that would establish a mandatory, nationwide label for foods that contain GMOs. If enacted, this agreement would preempt Vermont and other states and localities from establishing or carrying out conflicting GMO labeling laws. Under the proposal, the U.S. Department of Agriculture (USDA) would be directed to establish a mandatory GMO labeling standard within two years after enactment. Members intend that manufacturers would be able to disclose GMOs on their food packaging either through text on the package, a symbol, or a link to a website using a Quick Response (QR) code or similar technology.

The bill directs USDA to provide alternative, reasonable disclosure options for food contained in small packages. There would also be allowances for small food manufacturers. “Small food manufacturers” would have at least one additional year to comply with the labeling standards, while “very small food manufacturers” would be exempt from the GMO labeling requirement altogether. The bill, however, does not define either term.

This agreement is the result of months of negotiations between Chairman Roberts and Ranking Member Stabenow, and it contains key priorities for both Members. Aligned with the interests of the Chairman’s constituent ranchers, the bill would prohibit the USDA from considering any food derived from an animal to contain GMO based solely because the animal may have eaten GMO feed. Likewise, Ranking Member Stabenow fought to ensure that organic producers would be able to display a “non-GMO” label in addition to the organic seal. Although organic foods are by definition non-GMO, Ranking Member Stabenow recognized the importance of providing consumers with more information about the foods that they buy.

Chairman Roberts and Ranking Member Stabenow are now scrambling to get the 60 votes needed to pass their negotiated deal before the Senate recesses for the Independence Day holiday. As the House has already recessed, the lower chamber will not consider the measure before Vermont’s law goes into effect on July 1. Assuming that the Senate approves the agreement before recessing, the House could consider the legislation when it returns on July 5. House Agriculture Committee Ranking Member Collin Peterson (D-MN) has endorsed the bill.

Manufacturers should, by now, be prepared to comply with the Vermont law. Under the law, there is a presumption of compliance for foods distributed before July 1, 2016 and sold for retail until January 1, 2017. Foods produced before July 1, 2016, but distributed after that date, will not receive this presumption and be subject to penalties. As for civil liability, consumers must wait until July 1, 2017, one year from the law taking effect, to bring a private right of action against a manufacturer.

If enacted, Congress’s GMO labeling measure would preempt the Vermont law, and manufacturers would need to pay close attention to USDA’s implementation of the GMO labeling standards.

June 21, 2016

President Obama will soon sign sweeping amendments to the nation’s cornerstone chemicals control law, the forty-year-old Toxic Substances Control Act (TSCA). The amendments will re-invigorate the Environmental Protection Agency’s (EPA’s) program for controlling risks to human health and the environment from chemical substances. The amendments represent the results of more than a decade of legislative initiatives and more recent bipartisan negotiations. Companies that make or distribute products in the US should understand the key features of the final legislation before it impact their products.

The Context

TSCA provides EPA broad authority to regulate importers, manufacturers, and processors of chemical substances, including authority to regulate commercial and consumer use products into which chemical substances are blended. For example, under the current law, EPA must be notified before any “new” chemical substances enter U.S. commerce. The Agency can require new and existing chemical substances and products that contain those substances to be tested for health or environmental effects, and EPA may regulate chemicals in commerce when the Agency determines that the chemical substance presents an unreasonable risk to health or the environment. As enacted in 1976, TSCA did little to preempt the authority of the various states to regulate chemical substances. The law never fully realized its potential, and EPA took very few actions using TSCA to completely restrict specific chemical substances.

Significant Changes Coming Soon

Parallel legislative efforts in the House and Senate culminated this year when the chambers reconciled differing bills, enacting harmonized amendments to TSCA that were overwhelmingly supported by their members. The President will sign the bill this week.

Important Features of the New Law

Requires EPA to prioritize chemical substances for review and management and establishes deadlines. EPA must prioritize substances that are actively in commerce and undertake risk evaluations and make risk management determinations accordingly. Within six months of enactment, the Agency is required to rapidly identify an initial cluster of 10 “high priority” chemical substances that are undergoing risk evaluations and expand that list to at least 20 during the next three and one-half years. Simultaneously, EPA must designate substances as “low-priority.” A manufacturer of a chemical substance may voluntarily request a risk evaluation for its substance, provided the manufacturer pays a service fee to offset the Agency’s cost to perform the assessment. Persistent and bioaccumulative substances to which the general population is exposed will be subject to expedited regulatory actions.

Revises the standard for regulating chemicals and products. When assessing risks from exposures to chemicals and products that contain those substances, EPA will need to consider risks to vulnerable populations -- subgroups that may be uniquely susceptible (such as children and pregnant women). If EPA’s evaluation determines that a substance will present an unreasonable risk, the Agency must issue a regulation to manage those risks. EPA’s decisions will be expected to reflect the “best available” science and the “weight of the evidence.”

New chemicals will be subject to EPA review and determinations. New chemical substances may not enter commerce until EPA makes an affirmative determination concerning health and environmental risks, including to vulnerable subpopulations.

Increases public access to information on chemicals and data. EPA will need to issue an annual work plan for reviewing chemicals and data and publish information on substances and uses of chemicals undergoing EPA reviews.

Expands and escalates fees. The amended law authorizes EPA to collect fees from chemical makers and processors to defray EPA’s costs of implementing the new law.

Partial preemption of state chemical-regulatory actions. In recent years, state chemical control requirements have popped up around the county, wreaking havoc for the makers and distributors of nationally-marketed products. Under the amended law, certain final EPA regulatory actions on chemical substances will preempt state regulation of the same substances, subject to various exceptions.

More Information and Guidance on Steps You Can Take Now.

An in-depth evaluation of the legislation, including the ways it can affect businesses and the steps that can be taken now to avoid significant disruptions is available here. Arnold & Porter is hosting an informational session June 28th in collaboration with the ABA’s Committee on Pesticides, Chemical Regulation, and Right-to-Know law. Contact jay.jantz@aporter.com by email to sign up to participate, or use the ABA’s enrollment page.

June 02, 2016

The House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade plans to take up legislation to reform and limit the authority of the Federal Trade Commission (FTC) as part of its #DisruptFTC series. Subcommittee Chairman Michael Burgess (R-TX) said that he plans to combine some of the FTC reform bills considered at a recent May 24 legislative hearing to create a comprehensive piece of legislation. While he has not decided which bills he will include in his combined legislation, Chairman Burgess noted that the bills focused on reforming the FTC’s processes are his highest priority. A date for a mark-up of the bills has not been announced but is likely to occur before Congress recesses for the presidential conventions in July.

At the recent legislative hearing, FTC Chairwoman Edith Ramirez was a key witness and opposed a majority of the FTC reform bills given the effect the legislation would have in limiting the Commission’s authority. While most of the witnesses supported the subcommittee’s FTC reform efforts, David Vladeck, a law professor at Georgetown Law and Director of the FTC’s Bureau of Consumer Protection from 2009 to 2012, was one of the witnesses invited by the Democratic members of the Subcommittee and opposed most of the bills along with Chairwoman Ramirez. A complete witness list is available here.

Below are seven takeaways on the key bills in the #DisruptFTC series, which we initially profiled in our May 5 blog post.

General Federal Trade Commission Opposition. The Federal Trade Commission opposes all of the #DisruptFTC bills, except for the Consumer Review Fairness Act (see Takeaway #3). In sum, Chairwoman Ramirez believes the bills would create unintended consequences, administrative burdens, and at times, processes that undermine the objectives they are trying to achieve.

Technological Innovation through Modernizing Enforcement (TIME) Act (H.R. 4093). Supporters want the bill strengthened by including an additional procedural change that allows a company subject to a consent decree to petition for review of its consent decree. Chairwoman Ramirez, however, opposes the bill because the Commission already has review procedures in place. Supporters also are asking the committee to consider a shorter sunset time for all consent orders -- from the agency practice of requiring 10 to 20 year consents to 8 years.

Consumer Review Fairness Act (H.R. 5111). This is the only measure to receive support from all of the witnesses. The Chairwoman views the bill as an additional law enforcement tool to prevent companies from removing unfavorable reviews of products and services from websites and other sources of product information for consumers. Other supporters believe the bill’s approach is a better alternative to piecemeal FTC enforcement actions. This bill is a priority for online review platforms, such as Yelp, TripAdvisor, and others.

Clarifying Legality and Enforcement Action Reasoning (CLEAR) Act (H.R. 5109). Chairwoman Ramirez opposes the bill because companies under investigation could be easily identified from the legal analysis and industry details in the required annual report to Congress. Opponents also argue that the burdens imposed do not outweigh the benefits. Supporters counter by requesting Congress to appropriate funds to implement the bill.

Start Taking Action on Lingering Liabilities (STALL) Act (H.R. 5097). The FTC fails to support the bill because “[i]t is intended to relieve businesses of a burden - uncertainty about whether an FTC investigation is still open - but may impede the Commission’s ability to protect consumers without adding corresponding benefits,” according to Chairwoman Ramirez. Supporters request that the bill be strengthened by requiring the FTC to send notification of an investigation’s extension.

Solidifying Habitual and Institutional Explanations of Liability and Defenses (SHEILD) Act (H.R. 5136). The bill would allow compliance with policy guidelines and guidance to be used as evidence of compliance with the law. Chairwoman Ramirez believes that the measure creates challenges for the FTC when considering how the law applies to the specific facts of a case, as guidance could be substituted for law. Supporters seek further clarifications, including amendments to: (1) ensure that reports, consent decrees, and FTC practices are not binding; (2) specify when a defendant may provide evidence to show compliance with FTC guidance; and (3) encourage the FTC to issue more guidance and policy statements.

Statement on Unfairness Reinforcement and Emphasis (SURE) Act (H.R. 5115). The FTC opposes this bill because codifying selected portions of the Policy Statement on Unfairness will unintentionally create challenges for the Commission to initiate law enforcement actions. Chairwoman Ramirez noted that the bill might undermine the FTC’s efforts to prevent likely substantial harm before it occurs, despite the fact that Section 5 expressly empowers the Commission to prevent entities from engaging in unfair or deceptive acts or practices. Supporters requested amendments to require a preponderance of the evidence standard in unfairness actions and a requirement that the Bureau of Economics publish a separate cost-benefit analysis with consent decrees.

We will continue to monitor developments in this area and provide updates, accordingly.

May 05, 2016

On Thursday, May 28, the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade introduced six bills limiting the authority of the Federal Trade Commission (FTC) as part of the launch of the subcommittee’s initiative - The Disrupter Series (#DisruptFTC). The series represents arguably the most congressional scrutiny the FTC has received since the 1980s. Subcommittee Chairman Michael Burgess (R-TX) described the aim of the series as an evaluation of the FTC to inform the subcommittee’s policy decisions on job creation and to remove challenges to innovation within the current and future marketplace.

Consumer Review Fairness Act (H.R. 5111). The measure would prohibit companies from trying to silence customer opinions online. This bill is an outlier because it supports action the FTC has taken in this area. For example, in September 2015, the FTC filed a complaint against a weight-loss supplements manufacturer claiming the company attempted to prevent consumers from sharing their negative experiences online. Subcommittee Vice Chairman Leonard Lance sponsored the bill.

Start Taking Action on Lingering Liabilities (STALL) Act (H.R. 5097). The legislation would terminate an FTC investigation that has been inactive for six months, except when the FTC votes to extend the investigation before the six-month expiration period or the FTC sends a written communication about the investigation to the person who is the subject of the investigation. Rep. Susan Brooks (R-IN) sponsored the bill.

Although some proponents view the FTC reform bills as common sense business measures, the likelihood of enacting the reform bills is slim, with it being an election year and Democrats opposing some of the measures. In the House, there may be further discussion within the Energy and Commerce Committee on these bills and possible floor consideration, although it is unclear at this time. In the Senate, some of the bills may be incorporated into the Standard Merger and Acquisition Reviews Through Equal Rules Act (SMARTER) Act (S. 2102/H.R. 2745), which aims to have the FTC and Department of Justice use the same standards and procedures when they review mergers.

March 10, 2016

The Vermont GMO labeling law takes effect on July 1, and so far there is no word from the Second Circuit Court of Appeals on the food industry’s challenge to the law, which would require special labeling of most foods sold in Vermont and could have a practical effect on the labels of foods sold nationwide. Congressional leaders are therefore under pressure to agree on a national standard that can pass the Senate floor, survive conferencing and House consideration, and be signed into law prior to July 1. March 2016 has brought a flurry of legislative proposals and activity intended to preempt the Vermont law that should be monitored by any company that sells products that contain genetically modified components.

Most significantly, on March 1, the Senate Agriculture Committee reported out favorably by a vote of 14-6 Chairman Pat Roberts’s (R-KS) bill on biotechnology labeling. The bill would establish a national voluntary GMO labeling standard and preempt state GMO labeling laws. The bill, however, would not preempt Vermont’s GMO labeling law on the definition of “natural.” As we discussed here, the Food and Drug Administration (FDA) is currently considering whether to define the term “natural” and set guidelines for how the term is used for food products, including products containing GMO ingredients. Chairman Roberts’s bill also would direct the Department of Agriculture to educate and engage consumers on biotechnology and require a report to Congress on what GMO information is publicly available.

While all Republicans voted for the bill, approval was not based on a party-line vote. Three Democrats, Senators Joe Donnelly (IN), Heidi Heitkamp (ND), and Amy Klobuchar (MN), voted in favor of the bill, contingent on the Chairman working with Ranking Member Debbie Stabenow (MI) to find a compromise to the voluntary standards. Both Senators Heitkamp and Klobuchar expressed concern that the bill does not do enough to educate consumers about the sourcing of their food. Senator Heitkamp, who has been a longstanding supporter of biotechnology, said that while the bill does help to protect interstate commerce, she has reservations with how the bill preempts state laws through a voluntary provision.

Ranking Member Stabenow has indicated that negotiations will focus on mandatory disclosure. She has previously floated a two-year temporary preemption followed by a mandatory GMO labeling; however, this proposal was a non-starter for Republicans. Her position on mandatory disclosure and concerns about preempting state laws are the primary reasons for Democrats opposing the current bill.

Some Democrats, including members of the Agriculture Committee, introduced a GMO labeling bill aimed at requiring manufacturers to disclose genetically modified ingredients on the Nutrition Facts Panel. The Biotechnology Food Labeling Uniformity Act (S. 2621) would require manufacturers to select one of the four disclosure options: (1) use a parenthesis after an ingredient that is “genetically engineered”; (2) denote a genetically engineered ingredient with an asterisk and explain that it is genetically engineered at the bottom of the ingredients list; (3) include a statement of “produced with genetic engineering” at the end of the ingredient list; or (4) have FDA create a symbol to use on a product’s package to disclose that it contains genetically modified ingredients. The bill does not require warning statements or for the disclosure to be placed on the front of a product’s packaging.

According to recent reports, the Senate Agriculture leadership aims to have an agreement brought to the Senate floor by the Easter recess. In fact, it is likely that Senator Roberts’s bill could be considered on the Senate floor next week for a vote, particularly if a compromise can be reached between Chairman Roberts and Ranking Member Stabenow along with Senators Donnelly, Heitkamp, and Klobuchar. The industry-backed Coalition for Safe Affordable Food remains hopeful that a solution can be reached by July, especially with indications that Senate Majority Leader Mitch McConnell has expressed interest in seeing Senator Roberts’s bill move forward.

Given that the House passed its GMO labeling preemption measure (H.R. 1599) by a vote of 275-150 last July, the expectation is that Speaker of the House Paul Ryan (R-WI) and House Agriculture Committee Chairman Mike Conaway (R-TX) are in communication with Chairman Roberts to ensure that a GMO labeling measure would move fairly quickly in the House should the Senate pass its bill. Although the Obama Administration has not spoken directly on Chairman Roberts’s GMO labeling measure, Secretary Tom Vilsack remarked earlier this year that a patchwork of state laws on GMO labeling could create “chaos in the market” and repeated again this week that he wants to see disclosure requirements in the bill. He also has tried to work with industry, environmental groups, and consumer groups to find a working solution on GMO labeling to no avail. Therefore, if Senators Roberts and Stabenow are able to reach a compromise on a GMO labeling bill, it is likely that the Obama Administration will not issue a veto threat.

Unless Congress reaches an agreement on GMO labeling or the Second Circuit overturns a lower court’s ruling not to enjoin the State of Vermont decision to require GMO labeling, food manufacturers should be prepared to comply with the Vermont GMO labeling law on July 1.

December 13, 2015

Apparently, FDA (here, here) isn’t the only part of the government (e.g., here, here) that wants people to know its position on the “appropriate” way to describe and define products

On December 9, 2015, the FTC announced settlements with four companies that allegedly marketed textile products made from rayon as “bamboo.” According to the FTC, the companies violated the Textile Act, the Textile Rules, and The FTC Act by marketing rayon products as “bamboo” despite receiving warning letters from the FTC in 2010 and a synopsis of previous litigated cases against marketers for deceptively labeling rayon products as bamboo. The FTC’s enforcement action is another move against the alleged sale of rayon product marketed as bamboo, this time resulting in civil penalties totaling around $1.3 million.

The FDA and the FTC have the authority to regulate the labeling and promotion of most consumer packaged goods through statutes (e.g., the Federal Food, Drug, and Cosmetic Act, Federal Trade Commission Act, Fair Packaging and Labeling Act, Textile Act, Fur Act, and Wool Act) and related implementing regulations. But as the agencies continue to flex their muscles in this arena, affected industries (and their advocates) are feeling more empowered to push back.

On December 4, ECM BioFilm filed an appeal with the 6th Circuit regarding the Federal Trade Commission’s October 15, 2015 decision that ECM BioFilm made unsubstantiated “biodegradable” claims for its product. The appeal is a part of ECM BioFilm’s coordinated effort to overturn what it considers to be an overly burdensome standard for biodegradable claims set by the FTC in its Green Guides. The Commission’s October 2015 decision reversed the February 2015 initial decision by Chief Administrative Law Judge D. Michael Chappell, in which Chief Justice Chappell ruled that ECM BioFilms had proven with competent and reliable scientific evidence that its product accelerated biodegradation of conventional plastics and thus had substantiated its unqualified “biodegradable” claims. Notably, Chief Justice Chappell’s initial decision rejected the position codified in the FTC’s Green Guides at 16 CFR 260.8 that “it is deceptive to make an unqualified degradable claim for items entering the solid waste stream if the items do not completely decompose within one year after customary disposal.” While the Commission’s October 2015 decision does not discuss the merits of the “within one year after customary disposal” standard (and instead focuses on a five year standard), the 6th Circuit’s treatment of this case could impact the Commission’s application of the “one year” standard codified in the Green Guides in the future.

On December 3, twenty four Members of Congress sent a letter to FDA Deputy Commissioner Michael Taylor, expressing their concern that a change in the E. coli standard for raw milk cheeses would unjustifiably bar artisan cheese producers from marketing many well-established recipes for cheese products. The FDA standard in question limited the level of non-toxigenic E. coli found in raw milk cheeses from 10,000 most probably number (MPN)/gram in 2009 to 10 MPN/gram, and was included in the FDA’s latest edition of its Compliance Program Manual and Compliance Policy Guide. The legislators’ letter requests that FDA reconsider the standard for legally marketed “cheese” based on the feedback of the legislators, the scientific community, and “whether there is a commensurate risk and public safety benefit with a more stringent standard.”

On December 1, KIND, LLC filed a citizen petition with FDA requesting that the Commissioner of Food and Drugs update FDA’s existing requirements for “healthy” claims to reflect recent federal dietary guidance and scientific evidence that emphasizes the importance of eating certain foods (e.g., vegetables, fruits, whole grains, low- or nonfat dairy, seafood, lean meats and poultry, eggs, legumes, and nuts and seeds) in achieving better health and wellness in contrast to an emphasis on specific nutrient levels in the diet. The petition cites the 2010 Dietary Guidelines for Americans and the Scientific Report of the 2015 Dietary Guidelines Advisory Committee as support for the change, and notes that the current standards exclude foods that “contain beneficial whole ingredients and are recommended for consumption—like nuts, avocados, olives, and salmon” from the definition of “healthy.” KIND received a warning letter from FDA in March alleging that it had violated the FDCA by labeling certain KIND snack bars as “healthy” that did not meet the requirements for such a claim as codified at 21 CFR §101.65(d)(2).

These, are just a few examples of recent action steps taken by federal agencies, legislators, and industry advocates to influence how advertisers can describe and define consumer products. This period of activity is largely centered on an understanding that what can be said about a product can have an enormous impact on the product’s marketability.

With this in mind, companies framing regulatory strategies should not only know (and monitor) the standards governing the manner in which their industry can label and market products, but also consider pushing for changes in standards where they appear to be either out-of-date or inconsistent with consumer expectations. It worked for Amarin and the International Jelly and Preserve Associations. And now others are following suit.

August 03, 2015

This summer has seen a flurry of new state-based legislative activity concerning data security and data breach notification, as Nevada, Oregon, Rhode Island and Connecticut have each amended their laws to strengthen protections for individuals affected by data breach. Many of these new laws expanded the definition of “personal information,” which, if released in an unencrypted form, can trigger notification obligations among entities storing consumer data.

Nevada amended its data breach notification laws in May 2015 to broaden the scope of “personal information,” which is defined as certain data elements combined with an individual’s name. The newly added data elements include a driver authorization card number, a medical identification number or health insurance identification number, and any username, email address, or unique identifier accompanied by a password, access code, or security question response, so as to permit access to an online account. The new law also clarifies a public availability exemption, which eliminates the notification requirement when the same information has already been released to the general public by the government.

Oregon enacted an amendment to the Oregon Consumer Identity Theft Protection Act in June 2015 that expands the definition of “personal information” to include certain biometric and medical data. The amended law also imposes a new duty to notify the Oregon Attorney General of any breach that results in notification to more than 250 residents, although it simultaneously releases entities from notifying consumers in the first place if the individuals affected by the breach are “unlikely to suffer harm.” The amendment similarly lowers the standard for notifying consumer reporting agencies by requiring notice to such agencies only when the breach affects more than one thousand residents.

Rhode Island passed the Rhode Island Identity Theft Protection Act (RIITPA) in June 2015, which extends the definition of “personal information” to include medical and health insurance information, as well as certain email address information. RIITPA requires notification to individuals affected by a data breach within 45 days of discovery, as well as notification to the state Attorney General within the same time frame if the breach involves more than 500 individuals. RIITPA also mandates that any entity doing business in Rhode Island that “stores, collects, processes, maintains, acquires, uses, owns or licenses personal information” about residents must implement a “risk-based information security program” to protect consumer data. If those entities wish to divulge personal information to third parties, they execute a written contract specifying reasonable security measures.

Connecticutrecently enacted amendments to its data security breach laws that will now require notification to individuals affected by breach within 90 days of discovery of the breach (with a permissible delay as necessary to fully investigate the breach). If the breach affects social security numbers, entities must also offer one year of complimentary identity theft prevention and mitigation services, as well as information on signing up for such services and implementing credit freezes. The amendments also establish new standards for protecting data in the health insurance industry, which now includes a “comprehensive information security program” that incorporates specific access controls. Most provisions of these new laws will take effect in October 2015 or in 2017.

June 25, 2015

The US House of Representatives has decisively taken the lead in the two-step dance that could update and reinvigorate the nearly 40 year old Toxic Substances Control Act (TSCA). Makers and processors of chemical substances and producers and distributors of consumer products have been monitoring legislative action on TSCA modernization efforts for nearly a decade. Suddenly, amendments to TSCA appear to be on an incredibly fast track even as we lurch into the hazy days of summer on Capitol Hill.

TSCA gives EPA broad authority to regulate chemical substance, including the products into which they are blended, including consumer use products. Legislation has been repeatedly introduced in both legislative chambers reflecting Congress’ and the Administration’s mutually held belief that the Agency’s authority under TSCA has been under utilized by EPA due to the burdensome procedures established in the nearly 40-year old law.

In an overwhelming 398-1 vote taken during a suspension bills session June 23, the House overwhelmingly passed the TSCA Modernization Act of 2015 (H.R. 2576). The bipartisan bill was reported out of committee unanimously earlier this month on the promise that certain fixes would be made prior to the floor vote. Key changes made following mark-up were engineered by the bill’s chief sponsor, Illinois Republican John Shimkus, and New Jersey Rep. Frank Pallone Jr., an indispensable Energy and Commerce Committee Democratic co-sponsor. If the Senate takes similar action on its own TSCA reform bill later this summer, the first significant piece of bipartisan environmental legislation in decades could be sent to the President for signature later this year.

On April 28, the Senate Environment and Public Works Committee marked up S. 697, the version of TSCA reform legislation that grew out of a bill originally co-sponsored by the late Senator David Lautenberg (D-NJ) and Louisiana’s Senator David Vitter (R-La.). The Lautenberg-Vitter bill was considerably modified to appease the concerns of certain states and environmentalists prior to its reintroduction by Senators Tom Udall (D-NM) and Vitter, who also renamed the bill to honor the late Senator Lautenberg. Curiously, Senator Boxer opposes the Senate’s own bill, and, having gained little traction for her own TSCA reform bill, now proclaims her support for the House bill.

The Senate bill represents a more comprehensive overhaul of TSCA, making amendments to or replacing virtually every section of the current law, while the House version makes more targeted amendments to the risk assessment and risk management provisions of TSCA. Nevertheless, as the debate over the bills has matured, amendments have been adopted that have increased the similarities in the House and Senate legislation.

Of interest to the makers of consumer products, both bills specifically address EPA’s authority to use TSCA to regulate finished products. Both the House and Senate bills would amend the provisions that provide EPA authority to evaluate chemical substances already in commerce and simplify the procedural hurdles EPA must meet to impose restrictions on substances to mitigate unreasonable risks to human health and the environment. Persistent and bioaccumulative chemicals would receive special attention under both bills. The bills would establish timelines that require EPA to take regulatory actions within a specified period after commencing and completing a safety assessment for a chemical substance. Moreover, the House and Senate versions would enable a chemical manufacturer to request that EPA undertake an assessment and reach a determination concerning the safety of the current and intended uses of a substance -- provided the Agency’s costs for doing so are paid by the manufacturer. The bills would modify the current law so EPA could release confidential information on chemical substances to state and local agencies for purposes of state regulatory and enforcement programs. The legislation under consideration in the Senate would, like the House bill, impose what are likely to be significant new fees on the chemical industry to offset EPA’s costs of its chemical risk assessment and management program. The bills both provide for partial preemption of state chemical regulatory actions, although both grandfather in state laws enacted before August 2015.

The Senate has not scheduled a date for a floor vote on its own bill, but a vote is expected before the summer concludes.

June 16, 2015

Local governments are increasingly seeking to regulate consumer products -- everything from toys and cell phones, to soda and pharmaceuticals. But hardly before the ink can dry on these ordinances, business groups sue to block them, relying primarily on principles of free speech, federal preemption, and interstate commerce.

Most recently, CTIA – The Wireless Association sued Berkeley, California over its May 26, 2015 cell phone ordinance. The law requires cell phone retailers to provide consumers with a notice that if they carry the phone in a pocket or under their clothing while the phone is on, they may exceed the federal guidelines for exposure to radio frequency radiation. The CTIA lawsuit alleges that the statement is “compelled speech” that is “not only scientifically baseless and alarmist, but . . . also contradicts the federal government’s determination that cell phones approved for sale in the United States, however worn, are safe for everyone.”

CTIA has been successful challenging similar—albeit broader—ordinances in the past. When San Francisco passed a “Cell Phone Right to Know” ordinance requiring cell phone retailers to inform customers about measures to reduce exposure to radiation, CTIA sued in federal court on First Amendment and preemption grounds. The district court denied the bulk of CTIA’s federal preemption and free speech while requiring San Francisco to revise its fact sheet, but the Ninth Circuit, in an unpublished opinion, reversed, citing FCC regulations and noting that the agency “has established limits of radiofrequency energy exposure, within which it has concluded using cell phones is safe.” The court also noted that “San Francisco concedes that there is no evidence of cancer caused by cell phones” and that therefore the fact sheet cannot be said to be “purely factual and uncontroversial.” Accordingly, San Francisco was forced to drop the ordinance.

Cell phones aren’t the only products being regulated by local governments. Recently, Albany and Westchester counties in New York State passed local laws banning certain children’s products and apparel allegedly containing toxic chemicals such as lead and mercury. In Albany County, toy industry groups have already filed suit in federal court (with Arnold & Porter as lead counsel), arguing that the ban is preempted by federal law.

And the county in which Berkeley is situated initiated a trend in local regulation by requiring pharmaceutical manufacturers to establish programs for taking back unused products and educating consumers not to throw them away. PhRMA, the trade association of pharmaceutical companies, sued to block this ordinance, but once the Ninth Circuit rejected that challenge, other localities -- including San Francisco -- began implementing similar programs.

San Francisco soon might find itself in another legal battle over its regulations, as supervisors this week approved an ordinance that would require warnings on print advertising for products such as sodas with over 25 calories per 12 ounces. The label would read: “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.” The beverage industry has already indicated that it might sue if such a measure ultimately becomes law.

Industry groups have demonstrated that they are willing to fight these local ordinances, and—at least in CTIA’s case—their lawsuits have seen some success. But local governments appear to learn from past failures and are attempting to tailor their messages, no doubt in anticipation of legal battles ahead.

May 28, 2015

Continuing a national trend to enact or bolster state data breach notification laws, two more states signed new amendments into law this month that expand notification requirements for businesses that experience a data security breach. In addition to increasing notification obligations, both states also refined the scope of data that will trigger those obligations. In addition, Virginia established a new governmental organization to collect and share information on cybersecurity threats and took action to encourage statewide adoption of technologies that will enhance financial data security.

Washingtonamended its data breach notification law to impose new notification requirements on businesses exposed to data breach. The amended law requires businesses to notify affected individuals within 45 days after the breach is discovered whenever the breach is reasonably likely to subject consumers to a risk of harm. It further specifies the information that must be included in customer notifications, including basic information to help consumers secure or recover their identities, such as the contact information for consumer reporting agencies. Businesses must also notify the State Attorney General within 45 days of discovery whenever a data breach affects more than 500 Washington residents. Finally, the amended law expands coverage to include hard copy data (in addition to computerized data) and removes a blanket exemption for encrypted data, clarifying that a breach of encrypted data can trigger notification requirements if the encryption key or other decryption tools are acquired during the breach. The full text of Washington’s law as amended, which becomes effective in July 2015.

North Dakota amended its security breach notification law to require any person or business that experiences a breach of its security system affecting more than 250 individuals to disclose the breach to the State Attorney General. The amendment narrows the definition of “personal information” as it pertains to employee data. Now, a breach that compromises an individual’s employee identification number will only give rise to notification obligations if the breach also affects “any required security code, access code, or password” accompanying the employee identification number.

Virginia rolled out several initiatives in April and May to enhance security protections for financial data and to address cybersecurity threats, becoming the first state to address these issues in response to the President’s executive orders in October 2014 and February 2015. On April 20, Virginia announced the creation of the first state-level Information Sharing and Analysis Organization (ISAO), a new governmental organization intended to facilitate the collection and sharing of information related to cybersecurity threats and attacks. This news comes on the heels of multiple high-profile data breach incidents and just two months after the Commonwealth of Virginia established the Virginia Cyber Security Commission to develop expertise in the area of cybersecurity. In addition, Virginia’s governor signed the “Securing Consumer Transactions” directive on May 5, which encourages adoption throughout Virginia of advanced electronic payment security technologies, including “chip-and-pin” authentication features. This directive instructs the Commonwealth’s technology and finance secretaries, treasurer, and comptroller to (1) update the state’s main purchase card program to include chip-and-pin technology by the end of the year, and (2) develop a plan to enhance the security features of merchant and prepaid debit card programs by October 1, 2015. The governor’s press release announcing Virginia’s ISAO is available here.

With these latest developments, data breach prevention and cybersecurity continue to be top priorities among states looking to address privacy concerns raised by their constituents. With new data breaches coming to light on a regular basis and a renewed national attention to consumer privacy, we can expect more legislative action on the horizon.

April 22, 2015

For years the more conscientious among us have faced a dilemma every time we check out: “Paper or plastic?” Which is better for the environment? Do I even need a bag? And ironically, now that more of us are shopping online and receiving daily shipments of cardboard and Styrofoam instead of carrying things home in a bag, local governments have started making the checkout decision for us.

Long the bane of environmentalists, plastic bags are banned or restricted in hundreds of localities across 37 states. Twenty-two state legislatures have considered similar legislation, with California (no surprise) being the first to enact a plastic bag ban. That law -- plus the state’s referendum process -- has made California ground zero for the battle between plastic bag manufacturers and environmentalists.

Caught in the middle are the retailers who have to comply with all of these laws. Some laws allow a retailer to charge a nickel for a paper bag. Others set the minimum at a dime. Some require charging for any type of bag. Some set requirements for sale of reusable bags, which must meet certain strength requirements. Some require that paper bags be made of recycled paper. Some require the funds collected to be segregated for certain purposes. Some impose a tax on plastic bags. Some require in-store recycling stations for plastic bags.

In California, this bewildering diversity of regulation across 126 (and counting) localities prompted the California Retailers Association and the California Grocers Association to join with environmental advocates and support a statewide law with uniform requirements. That law was scheduled to be phased in starting July 2015 but is now suspended pending a statewide referendum on the November 2016 ballot.

The American Progressive Bag Alliance, funded primarily by manufacturers of plastic bags, obtained enough signatures on a petition to overturn the law. Under California’s referendum process, that suspends the law until the voters have their say. So until then, California retailers must comply with all the various local laws. And Californians can now look forward to another round of entertaining and annoying political ads and dinner party discussions over a rather different right to choose.

The situation is reminiscent of menu labeling laws, where a similar dynamic of local, then state, regulation played out. National restaurant chains, facing an array of differing city and county rules for displaying calorie counts on their menus, supported uniform state legislation in California and then a federal law (which is just being implemented) that preempts differing state and local laws. It remains to be seen whether compliance with varying state and local requirements becomes such a headache that businesses -- who would prefer no regulation -- settle for uniform regulation.

Of course, the preemption battle can also play out in the other direction, as a recent New York Times article noted. The Governor of Texas -- who is concerned that his state is being “California-ized” -- has supported legislation preempting localities from regulating plastic bags in any way, prompting an outcry by local officials.

But for now, at least, fewer Texans and Californians will face this momentous choice at checkout. And store managers around the country will need to stay on top of hundreds of local requirements.

April 16, 2015

In the midst of substantial legislative attention to data security and privacy in states across the nation this year, two states took concrete action this month to clarify and expand notification requirements following a data security breach. In addition, the state of Connecticut opened a new agency department within the Office of Attorney General to handle data security and consumer privacy matters.

Montana and Wyoming each amended their data security breach notifications laws to redefine what constitutes personally identifiable information, altering the types of data that would trigger a notification requirement. Notably, both states now include health and medical record information within the category of personally identifiable information. In addition, Wyoming has removed certain employment data from the definition, including a person’s place of employment and employee identification number, and added other types of data, such as login and password information that would permit access to an online account. A separate bill amended Wyoming’s law to require companies to provide “clear and conspicuous notice” to individuals affected by a data security breach, including at a minimum a general description of the breach, the approximate date of the breach, actions taken to guard against future breaches, and advice for how to remain vigilant in protecting against identity theft. Lastly, Montana’s law now requires companies to notify the state attorney general’s Consumer Protection Office in addition to affected individuals, and insurance entities must also notify the state’s insurance commissioner. The full text of Montana’s law as amended, which becomes effective in October 2015, is available here. The amended provisions of Wyoming’s law go into effect in July 2015 and are available here and here.

Connecticut created a new permanent department within the Office of the Attorney General this month titled the Privacy and Data Security Department. Formed to continue the work of an interdisciplinary Privacy Task Force appointed in 2011, the new department will work exclusively on investigations and litigation related to data security and consumer privacy. The announcement from State’s Attorney General George Jepsen is available here.

These actions demonstrate a continued effort among select states to protect the personally identifiable information of their constituents, especially in the absence of a national data breach statute from Congress. Although Congress is currently considering a sweeping bill to establish a national standard for data breach notification, until its enactment companies storing personally identifiable information must navigate a complicated landscape of state law to ensure compliance. As of yet, 47 different state data breach notification laws remain in force.

June 13, 2014

. . . then we’d know where in the world she was thanks to geolocation information.

Many apps on mobile devices collect information about their users’ whereabouts and movements. This information can make apps more useful (such as navigation apps that provide directions) or more fun (such as social networking apps that tell users when friends are nearby). Sometimes, though not always, app users might choose to post geolocation information about themselves, such a Facebook status update that tags the location of a night out with friends, a child’s graduation, or a family vacation. This geolocation data, however, can reveal private information about individual consumers and, worries the Federal Trade Commission (FTC), could be misused without a user’s knowledge or consent.

On June 4, 2014, the Senate Judiciary Committee’s Subcommittee for Privacy, Technology and the Law held a hearing to discuss the recently-proposed Location Privacy Protection Act, S. 2171, sponsored by Senators Al Franken (D. Minn.), Chris Coons (D.-Del.), Elizabeth Warren (D.-MA), Richard Blumenthal (D.-CT), Richard Durbin (D-IL), and Dianne Feinstein (D.-CA). This legislation would generally prohibit mobile apps from collecting, storing, or sharing users’ geolocation information without a user’s informed consent. The witnesses included Jessica Rich, the Director of the FTC’s Bureau of Consumer Protection, who testified about the FTC’s ongoing efforts to protect consumers’ privacy in this area.

In her testimony, Director Rich praised the Location Privacy Protection Act as “an important step forward” in the protection of consumers’ private data. She laid out the three main benefits of the proposed Act: 1) providing a definition of “geolocation information” that is consistent with other online privacy rules; 2) requiring entities to disclose the fact that they collect geolocation information from consumers in advance; and 3) requiring certain companies to gain affirmative consent from consumers before collecting geolocation data or disclosing geolocation data to third parties.

She emphasized the highly personal nature of geolocation information, noting that it could reveal many aspects of a person’s private life, such as whether they visited an AIDS clinic, a psychiatrist’s office, or a place of worship. Director Rich testified that in the “wrong hands” this information could be ripe for abuse. For example, some businesses might collect consumers’ information and sell it to third party advertisers. In other cases, even if a business has its customers’ consent to collect and store geolocational data, if the business’ files are vulnerable to data-breaches, the consumers’ private data might be at risk.

Director Rich also discussed a few of the FTC’s recent enforcement actions focusing on the misuse of geolocation data, such as the agency’s recent settlement with Snapchat. In addition to several other privacy issues (we discussed the matter here), the FTC alleged that Snapchat transmitted its users’ geolocational data in violation of its stated privacy policy. In the settlement, Snapchat agreed no longer misrepresent its privacy and security policies and to implement a comprehensive privacy program. Finally, Director Rich highlighted the Commission’s outreach efforts, workshops, and reports aimed at educating businesses and consumers about geolocation data. We have written about these efforts here and here.

The proposed Location Privacy Protection Act and Director Rich’s testimony should serve as a reminder that government enforcers and privacy advocates remain focused on protecting consumers’ privacy. Businesses -- in particular mobile app developers -- should review their privacy policies and ensure that they are adequately protecting their customers’ geolocation information.

May 09, 2014

Vermont has become the first state to enact a law requiring labeling of foods containing genetically modified organisms (GMOs). Starting in 2016, this new law will require farmers and food manufacturers who sell their products in Vermont to label foods that have ingredients enhanced by genetic engineering (GE). The law, which was passed on April 23 and signed into law on May 8, is the first to require such labeling without any conditions.

Food industry groups have vowed to challenge the law in court. And taking them at their word, Vermont lawmakers created a $1.5 million legal fund to pay for any “costs or liabilities” of implementing the labeling requirements. Vermont is no stranger to having to defend its unusual consumer advertising regulations. The state previously faced litigation over similar labeling requirements for milk and mercury, which dairy farmers and electrical manufacturers challenged on Commerce Clause and Freedom of Speech grounds.

The Vermont GE labeling law applies to fresh produce sold in grocery stores and packaged foods sold at retail. Under the law, all GE fresh produce must be labeled ̶ or sold in a bin or shelf that states ̶ “produced with genetic engineering.” Processed foods that contain one or more GE ingredients must be labeled “produced with genetic engineering,” “partially produced with genetic engineering,” or “may be produced with genetic engineering.” Vermont has not yet provided guidance for when each label is to be used. Additionally, the law forbids GE foods or foods with GE ingredients from being labeled as “natural,” “naturally made,” “naturally grown,” or described similarly. The labeling law does not apply to restaurants, nor does it apply to meat or dairy products made from animals that consumed GE feed or feed with GE ingredients.

The passage of the Vermont law may provide momentum for similar initiatives in other states. Although voters in California and Washington have rejected ballot initiatives to require GMO labeling, two other states, Connecticut and Maine, have already passed laws that will require labeling of GE foods once a certain number of neighboring states adopt similar measures. Twenty-three other states reportedly have active bills that would require labeling of GE foods or foods with GE ingredients. Most notably, a bill in the the New York State Assembly recently passed the committee stage, the farthest any such bill has progressed. Federal lawmakers recently proposed legislation that would preempt state laws and provide uniform regulations for GE labeling, potentially assuaging the food industry’s concerns of a state-by-state regulatory patchwork. Still, the Vermont law represents a major victory for consumer groups supporting GE labeling laws.

Scientists use genetic engineering to enhance the genes of crops. This can make them, for example, more resistant to pests, better able to withstand droughts, and otherwise hardier. An estimated seventy to eighty percent of packaged foods in the US contain some kind of GE ingredient. Though the FDA has stated for more than two decades that there is “no basis for concluding that bioengineered foods differ from other foods in any meaningful or uniform way,” consumer and environmental groups have campaigned for labeling requirements for such ingredients because of concerns that the long-term effects of GE foods, a recent addition to the food supply, are unknown.

One prominent Vermont-based food company, Ben & Jerry’s, supported the legislation. As noted on their website, the transition to non-GMO ingredients is “complex.” Whether the rest of the food industry will need to undertake this analysis for all of their food products by January 1, 2016 may be determined in court.

April 17, 2014

US Representative Mike Pompeo (R-KS) joined with Representatives G.K. Butterfield (D-NC), Jim Matheson (D-UT), Marsh Blackburn (R-TN), and Ed Whitfield (R-KY) in introducing H.R. 4432, the “Safe and Accurate Food Labeling Act”: a bill to provide a unified, federal response to questions about labeling requirements for genetically-engineered foods and food ingredients (GEs). GEs are present in about 80 percent of the food in the United States. The bill has the support of major players in the agriculture, food, and biotech industries, who maintain that GEs are beneficial to consumers and are necessary to global food security. The bill has also raised concerns among consumer safety organizations, who point to surveys suggesting that over 90% of Americans support GE food labeling.

This proposed bill would require the FDA to review the safety of any new GEs entering the market. Currently, many GE developers voluntarily consult with the FDA before marketing their products, although there is no requirement for them to do so. The FDA does not conduct independent research as part of this consultation, but rather reviews a safety assessment prepared by the developer, along with relevant scientific literature and agency records. Under the proposed law, this practice would be codified, and if the FDA determined that the GE was safe for consumption, the product would not need any special labels or warnings. The bill would permit voluntary labeling indicating whether foods are or are not GE.

This law would also preempt the patchwork of proposed or enacted state laws addressing the issue by requiring mandatory GE labeling. Most notably, lawmakers in Connecticut and Maine have approved mandatory labeling laws, but the laws require additional states to pass similar legislation before going into effect. Similar measures have been defeated in other states, at a cost of millions of dollars to industry members opposing it. Dozens of other states have pending bills or ballot initiatives that would require labeling of GEs.

GE labeling has often been at issue in litigation where plaintiffs complain that marketing bioengineered foods as “natural” is “false or misleading,” a violation of the Federal Food, Drug, and Cosmetic Act (discussed in detail here). These claims have been the basis of numerous lawsuits, but with little success. In 2013, federal judges in the Northern District of California and the District of Colorado declined to rule on the issue, instead referring the cases to the FDA under the primary jurisdiction doctrine in order to avoid usurping the FDA’s regulatory and interpretative authority.

The FDA has long held that it has no basis to conclude that most GEs differ from other foods in any meaningful way, or that, as a class, foods developed by the new techniques present any different or greater safety concern than foods developed by traditional plant breeding.

Another proposed bill, one that would require labeling of GEs, has also been introduced in the Senate and House.

March 19, 2014

A lawsuit by the Missouri Attorney General over California’s unique egg regulations may hatch into something much bigger -- and eventually restrict the scope of California’s expansive Safer Consumer Products regulation (aka Green Chemistry).

As a result of Proposition 2, enacted by California voters in 2008, egg-laying hens in California will soon be living the good life. As of January 1, 2015, they must be provided with room to stand up, lie down, and extend their wings, which is supposedly impossible in widely used conventional cages.

But after the law was expanded in 2010 to prohibit the sale of eggs in California from out-of-state farms that do not comply with Proposition 2’s requirements (see A.B. 1437), Missouri’s Attorney General cried foul. He filed a lawsuit on behalf of Missouri egg farmers, who sell one-third of their eggs to California consumers, challenging the constitutionality of that law. Nebraska, Oklahoma, Alabama, Kentucky, and Iowa also joined the complaint in the Eastern District of California. They allege that the California regulations violate the Commerce Clause of the United States Constitution because “the bill’s true purpose was not to protect public health, but to protect California farmers from the market effects of Prop 2.”

California has sent mixed messages regarding the law. The legislature stated its purpose was to “protect California consumers from the deleterious, health, safety, and welfare effects of the sale and consumption of eggs derived from egg-laying hens that are exposed to significant stress and may result in increased exposure to disease pathogens including salmonella.” But a legislative committee originally stated its intent was to level the playing field for California egg producers, and the Governor’s message on signing on the bill crowed about its benefits for “California egg producers and animal welfare” – without mentioning the law’s supposed health and safety benefits. The court will need to unscramble these motives. If the court finds that California sought to discriminate in favor of the economic interests of its own citizens, then California will have to show it had no other viable alternative to protect its consumers from supposedly unhealthy eggs produced out of state – a high bar. But even if the court treats the law as non-discriminatory, California won’t get over easy. Instead, the egg-producing states can challenge the law if its burden on interstate commerce – the cost of renovating chicken coops producing over five billion eggs a year – is “clearly excessive” in comparison to its “putative local benefits.”

The outcome of this lawsuit could have wider implications for California laws that seek to condition the sale of goods in California on compliance with state regulations. Most important, California’s Green Chemistry (Safer Consumer Products) regulations authorize wide-ranging restrictions on consumer products sold in the state, regardless of where they are produced. Implementation of the regulations may be subject to challenge based on their extraterritorial reach. As we reported here, the agency recently announced the first three sets of “priority products” to be regulated. Manufacturers of the identified products will be required to engage in an analysis of whether a safer alternative to the identified chemicals could be used, including analysis of the environmental impacts of the manufacturing process, regardless of whether they occur in California. The agency will then take regulatory actions, which may include labeling requirements, use restrictions or bans, end-of-life waste management, and “[a]ny other outcome the department determines accomplishes the requirements.”

For decades, California requirements such as Proposition 65 and Volatile Organic Compound limits for personal care products have set de facto national standards for consumer products based on claimed health and environmental impacts inside California. We soon will see whether the interstate commerce clause will clip California’s regulatory wings or whether the Missouri AG will end up with egg on his face.

December 11, 2013

UPDATE 2 (1/16/2014): Off again, on again. After citing a procedural error and withdrawing its proposal to require reporting of arsenic, cadmium, formaldehyde, and mercury in children’s products in mid-December, Maine's Department of Environmental Protection (DEP) revived its rulemaking notices on Christmas eve. A hearing is now scheduled for January 14, 2014, and the comment deadline is now January 31, 2014.

UPDATE (12/16/2013): Maine says not so fast. On Wednesday, December 11, 2013, we reported that Maine’s Department of Environmental Protection (DEP) had proposed to require reporting of arsenic, cadmium, formaldehyde, and mercury in children’s products. On Friday, December 13, DEP withdrew its rulemaking notice, citing a “procedural error.” We will provide a further update if and when the rulemaking is revived.

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Companies that make or distribute children’s products containing arsenic, cadmium, formaldehyde, or mercury should take note: The Maine Department of Environmental Protection (DEP) is proposing to require companies to report the presence of those four chemicals in concentrations above de minimis levels. Assuming the proposed rules become final, arsenic, cadmium, formaldehyde and mercury would join two other chemicals--bisphenol-a and the chemical class nonylphenol and nonylphenol ethoxylates--as so-called “Priority Chemicals” under Maine’s Toxic Chemicals in Children’s Products law.

What are the de minimis levels?

If a Priority Chemical is intentionally added to the product, the proposed reporting rules would apply only if the chemical is present at concentrations above the “practical quantification limit” (or PQL), meaning the concentration that can be reliably measured by a laboratory under routine operating conditions. The PQL can vary from chemical to chemical, and product to product. Although the proposed rules do not explicitly say so, the law under which they were issued also requires reporting of a Priority Chemical that is a contaminant (i.e., not intentionally added) at levels above 100 parts per million.

What’s covered?

The rules would apply to manufacturers, importers, and distributors of the following children’s products intended for use by a child under 12 years of age: bedding, childcare articles, cosmetics, craft supplies, footwear, games, jewelry and embellishments, safety seats, occasion supplies (e.g., costumes and party favors), personal accessories, personal care products, school supplies, and toys.

What’s next?

The Maine DEP will hold a hearing on the proposed rules on December 17, 2013, and comments are due by January 10, 2014. If the proposed rules go into effect, reports from manufacturers will be due 180 days following the effective date. Maine would then be the second state to require public reporting for these substances. The four proposed rules are available for download here.